Ahhhh! For once, an article entirely about something positive; i.e., the fun bullion coin collecting can be, when one gains a working knowledge of how the industry works.
In my case, I started acquiring physical metal in 2008 – at which point, I knew next to nothing of the pros and cons of specific investment products. Eight years later – including 4½ as the Marketing Director of one of America’s largest bullion dealers – I know a LOT more about gold, silver, and platinum coins; and consequently, what to look for when considering new purchases. Or sometimes, swaps – as per this must hear interview with Miles Franklin’s President and Co-Founder, Andy Schectman, there are a variety of “trades” that can be executed to optimize one’s Precious Metal portfolio – to capitalize on tax considerations, out-of-whack gold/silver or gold/platinum ratios, or perceived over- or under-valuation of numismatic products. Frankly, in today’s decidedly “abnormal” price environment, there’s never been a better time to consider such actions.
Regarding today’s article title, those familiar with Miles Franklin are well aware that we do NOT recommend numismatic products to anyone but hobbyists and otherwise precious metal experts. In our view, the principal reason to own PMs is protection of your life’s savings, and insurance against the ominous political, economic, and social developments plaguing the world today. That said, when “numismatics” – i.e., products with subjectively determined value, above and beyond melt value – trade at or near melt value, we aggressively market them to clients.
Like any subjectively valued market, “bargains” arise from time to time, for a variety of reasons. And when they do, you are afforded the rare opportunity to acquire rare coins at or near melt value, with a zero or low cost “option” on future numismatic value. In our business, the most common reasons for such price anomalies are general PM market apathy; “emergency” product sales; and in the case of the Royal Canadian Mints,’ or RCMs,’ limited edition Wildlife, Birds of Prey, Call of the Wild, and Predator series’ – or for that matter, the Perth Mints’ “exotic and dangerous creatures” series (like the Saltwater Crocodile and Funnel Web Spider) – the simple fact that upon issuance, they are not yet perceived to be supply constrained.
To that end, Miles Franklin has marketed the aforementioned RCM series’ immediately following their issuance’s – as in each case, issuance prices were essentially the same as generic Maples. And in each case, gold or silver, their value relative to generics increased over time. Typically, the RCM has issued one-a-year series’ in February; and for two-a-year series,’ February and September. And each time, Miles Franklin aggressively marketed the newly issued coins – such as the silver Peregrine Falcon in February 2014; and both the silver Red-Tailed Hawk and gold Growling Cougar in February 2015.
Miles Franklin does NOT guarantee the new issuance’s will garner significant premiums over generic Maples; or that older issuance’s will maintain the premiums they have attained thus far. However, after ten such silver issuance’s; and two gold issuance’s; it’s difficult to make the case a trend isn’t forming. Moreover, the oldest series’ continue to hold the highest values – such as the silver “Wildlife” Wolf, issued in 2011; the silver “Birds of Prey” Peregrine Falcon, issued in 2014; and the gold “Call of the Wild” Howling Wolf, also issued in 2014.
Below, I have compiled a table of where each of the six “Wildlife” and four “Birds of Prey” series’ are trading relative to generic silver Maples, in chronological order of issuance. Each of the ten series was limited at exactly one million ounces, to never be minted again. As you can see at the bottom of the chart, the new silver Cougar “Predator” is already trading at a 3%-4% premium, despite having just been issued two weeks ago (disclosure, I bought some this morning). In my view, the reason its premium has risen so quickly is because investors are assuming that it, like the “Wildlife” Wolf and “Birds of Prey” Peregrine Falcon, it will in time have the highest premium of the four-coin silver “Predator” series.
After the silver “Predator” Cougar (not to be confused with the silver “Wildlife” Cougar or the gold “Call of the Wild” Growling Cougar), the second of the silver “Predator” series will be issued in September 2016 – followed by the third and fourth coins in February 2017 and September 2017, respectively. In our view, the Cougar’s 3%-4% premium ($0.60-$0.70/coin) relative to generic silver Maples is low enough that the risk of it losing its “numismatic” value – relative to the potential for it to garner a significant premium over time – is immaterial.
As for gold, the third and final of the three-coin “Call of the Wild” series was issued two weeks ago as well; i.e., the “Roaring Grizzly.” Like 2014’s “Howling Wolf” and 2015’s “Growling Cougar,” the “Roaring Grizzly” is .9999 fine gold, making the series the world’s only “five nines” gold issuance. As you can see, they come individually packaged with an assay card on the back; and like generic gold Maples, are Precious Metal IRA eligible.
Unlike the silver “Wildlife”; “Birds of Prey”; and “Predator” series’, the mintage of the gold “Call of the Wild” series was not officially capped. That said, we are quite confident that the February-2014-issued Howling Wolf was discontinued when the Growling Cougar was issued in February 2015; and in turn, the Growling Cougar when the Roaring Grizzly was issued earlier this month. The reason being, that Howling Wolf supply essentially dried up a year ago; as did Growling Cougar supply this month. As you can see below, the Howling Wolf now trades at a roughly $150/oz premium to generic gold Maples; while in the Growling Cougar’s case, the vast majority of its premium expansion occurred in the last two weeks; i.e., when we believe its issuance was discontinued. More so than the silver Cougar “Predator,” the gold “Roaring Grizzly” – released just two weeks ago – trades barely above the price of a generic Maple, by just over 1%. Thus, for those considering new gold bullion purchases, we believe the “Roaring Grizzly” may be the “cheapest numismatic around!”
If you have any questions about the silver Cougar “Predator” or gold “Roaring Grizzly” – or any other Precious Metal product – please call us at 800-822-8080, or email me at [email protected].